Driving factors for industrial growth are expected to fuel continued demand
SANTA BARBARA, Calif., Sept. 24, 2021 – Industrial real estate has continued to thrive throughout the pandemic, leading Yardi® Matrix to analyze whether the segment is experiencing a bubble or if growth will continue for foreseeable future.
Those macroeconomic variables include retail sales, housing starts and personal income, which appear to have staying power, according to a new Matrix Bulletin. They have created increased demand for e-commerce and retail sales. In turn, that powers absorption, higher rents and investor demand for industrial properties.
“Those factors are projected to continue to grow robustly through the middle of the decade,” say analysts. “Given the strong historical correlation, we believe that demand for industrial space will continue unabated for at least several more years.”
The Matrix forecast calls for a 2.0% to 2.3% annual increase in total stock over the next five years, which would generate between 350 million and 370 million square feet of new industrial space each year through 2026. That follows the more than 290 million square feet of industrial space that has been delivered annually since 2018, peaking at 306 million square feet in 2020.
Read more about the factors influencing industrial real estate’s continued strength.
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